Credit scores are used by potential lenders to make decisions regarding extension and terms of credit. These scores are determined by weighing different factors of your credit history.
FICO Score
The most commonly used type of score is a FICO score, named after the company that developed software for the credit-scoring system used to calculate this score.
Score Range
FICO scores range from 300 to 800. The higher the number, the better your credit score. Any number more than 700 is considered good.
Score Calculation
Scores are calculated based on information from these categories: payment history, amounts owed, length of credit history, types of credit accounts and new credit accounts.
Negative Information
Negative credit information, such as late payments or charge-offs, remain on your credit report for seven years, during which time they will impact your credit score. Bankruptcy stays on a credit report for 10 years.
Score Ranges
Prospective borrowers with credit scores of more than 700 can expect to get the best credit terms and rates. A score of less than 600 is considered higher risk, and borrowers in this category will pay higher interest for credit.
0 comments:
Post a Comment